Chinese investment in South Africa

As a Hong Kong listed company, Taung is acutely aware of the significance of Chinese investment in South Africa. Chinese investors have been steadily building their direct and indirect investments in South Africa during the last decade. And it is not just in mining and minerals.

There have also been a distinct moves into sectors such as manufacturing, banking, textiles, property and agriculture. Amongst the more significant investments was the investment by the Industrial and Commercial Bank of China (“ICBC”) which purchased a 20 % stake in the assets and earnings of Standard Bank, one of South Africa’s largest banks, for US$5,5 billion. Chinese electronics manufacturer, Hi Sense, entered the South African market in 1997. In 2013, the company established an industrial park in Cape Town in the Western Cape Province. This investment is expected to create more than 1,200 jobs and consolidate the company’s 30 % market share in the television set sector. The China Africa Development Fund (“CADFund”) assisted Hi Sense with the financing.

Other Chinese flagship companies such as Zhong Xing Communications (ZTE) and Huawei Technologies are also expanding their presences in South Africa.

On the minerals front, however, Chinese investors have been bold and wide-ranging in their investments.

In the mining sector

South Africa currently ranks second in China’s mining investment into Africa. Amongst the more significant investments was the $227 million acquisition by the Jinchuan Group and the China-Africa Development Fund of a 45% stake in Wesizwe Platinum, a junior company in the preliminary stages of establishing a mine. At the time of the acquisition the Chinese investors also helped raise a $650 million project finance facility develop Wesizwe’s Frischgewagde mine

In 2011, the China Investment Corporation (“CIC”) paid $243 million (R2 billion at the time) for a 25 % shareholding in Shanduka group. Shanduka Gold, has a 23.8% interest in Pan African Resources which in turn manages a gold operation near to Taung’s own Evander Project.

Other Chinese companies presently involved in South African mining include Zijin Mining, Minmetals, Jiquan Iron and Steel (“JISCO”), East Asia Metals and Sino Steel. Zijin is developing the Blue Ridge Mine and Sheba Mine in the north of South Africa. Sino Steel is involved in a joint venture with a parastatal (Lindev) to operate a chromium mine in the Limpopo Province and has invested in the development of another mine with manganese operator, Cemencor.